EXECUTION
      COPY




January
      31, 2007




Navistar
          Financial Corporation
 Navistar
          Financial Retail Receivables Corporation
 425
          N
          Martingale Road
 Suite
          1800
 Schaumburg,
          Illinois 60173
  Re:    
          Waiver
   Ladies/Gentlemen:


Please
      refer to the Receivables Purchase Agreement, dated as of July 30, 2004 (as
      in
      effect on the date hereof, the "Receivables Purchase
      Agreement") among Navistar Financial Retail Receivables Corporation, as
      Seller, Navistar Financial Corporation, as Servicer, Thunder Bay Funding, LLC,
      as Company, and Royal Bank of Canada, as Agent. Capitalized terms used but
      not
      defined herein have the respective meanings ascribed to them in the Receivables
      Purchase Agreement.




The
      Receivables Purchase Agreement requires, among other things, the
      following:




(i
      )  Section
      5.1(a) requires that the Servicer deliver to the Agent (x) within 120 days
      after
      the close of each fiscal year, a copy of the annual report for the Servicer
      for
      such fiscal year on Form 10-K (the "10-K Delivery
      Requirement") and (y) within 45 days after the close of the first three
      quarterly periods of a fiscal year, a copy of the quarterly report for the
      Servicer for such fiscal year on form 10-Q (the "10-Q Delivery
      Requirement"); and




(ii)  Section
      6.10 requires that on or before February 1 of each year, beginning February
      1,
      2005, the Servicer shall cause a firm of independent accountants to deliver
      to
      the Agent an independent Accountant's Report for the preceding fiscal year
      (the
"Independent
      Accountant's Report Delivery Requirement").




For
      (x)
      the fiscal year ended on October 31, 2005 (the "2005 Fiscal Year"),
      the Servicer has failed to satisfy the 10-K Delivery Requirement and has failed
      to satisfy the Independent Accountant's Report Delivery Requirement and (y)
      the
      fiscal year ended on October 31, 2006 (the "2006 Fiscal Year"),
      the Servicer expects to fail to satisfy the 10-K Delivery Requirement and
      expects to fail to satisfy the Independent Accountant's Report Delivery
      Requirement.




Additionally,
      the Servicer has notified the Agent that it (i) has failed to timely file its
      annual reports on Form 10-K for the 2005 Fiscal Year and the 2006 Fiscal Year
      with the Securities and Exchange Commission in accordance with the Securities
      and Exchange Act of 1934, (ii) has failed to timely file quarterly reports
      on
      Form 10-Q for all of its fiscal quarters in 2006 with the Securities Exchange
      Commission in accordance with the Securities Exchange Act of 1934, and (iii)
      may
      fail to timely file one or more of its quarterly reports on Form 10-Q for


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fiscal
      quarters in 2007 with the Securities and Exchange Commission in accordance
      with
      the Securities and Exchange Act of 1934 (the occurrence of any such failure,
      a
"Periodic Reporting
      Failure").




The
      Servicer has requested that the Agent waive any potential Servicer Defaults
      arising from the matters described above. The Agent hereby agrees to waive
      the
      occurrence of any Servicer Defaults to the extent described below.




1.  The
      Agent hereby waives any Servicer Default arising solely from the failure to
      satisfy the 10-K Delivery Requirements for the 2005 Fiscal Year and the 2006
      Fiscal Year; provided that this waiver shall only remain effective until October
      31, 2007 unless the Servicer shall have satisfied the 10-K Delivery Requirements
      for the 2005 Fiscal Year and the 2006 Fiscal Year prior to such
      date.




2.  The
      Agent hereby waives any Servicer Default arising solely from the failure to
      satisfy the 10-Q Delivery Requirements for any fiscal quarter in the 2006 fiscal
      year of the Servicer and any fiscal quarter in the 2007 fiscal year of the
      Servicer; provided that this waiver shall only remain effective until October
      31, 2007 unless the Servicer shall have satisfied the 10-Q Delivery Requirements
      for each fiscal quarter in the 2006 and the 2007 fiscal year of the Servicer
      prior to such date.




3.  The
      Agent hereby waives any Servicer Default arising under Section 5.1(c) of the
      Receivables Purchase Agreement from any Periodic Reporting Failure; provided
      that this waiver shall only remain effective until October 31, 2007 unless
      the
      Servicer shall have caused the annual reports and quarterly reports giving
      rise
      to any Periodic Reporting Failure to be filed with the Securities and Exchange
      Commission prior to such date.




4.  The
      Agent hereby waives any Servicer Default arising solely from the failure of
      the
      Servicer to satisfy the Independent Accountant's Report Delivery Requirement;
      provided that this waiver shall only remain effective until October 31, 2007
      unless the Servicer shall have satisfied the Independent Accountant's Report
      Delivery Requirement prior to such date.




The
      Agent
      hereby expressly reserves, and nothing herein shall be construed as a waiver
      of,
      (i) any Servicer Default specified in paragraphs 1, 2, 3 and 4 above, to the
      extent that the effectiveness of the waiver of such Servicer Default shall
      lapse
      as described therein and (ii) any rights with respect to any breach constituting
      a Servicer Default or Potential Servicer Default existing or arising for any
      other reason.




This
      waiver may be executed in any number of counterparts and by the different
      parties on separate counterparts, and each such counterpart shall be deemed
      to
      be an original but all such counterparts shall together constitute one and
      the
      same waiver. This waiver shall be a contract made under and governed by the
      internal laws of the State of New York applicable to contracts made and to
      be
      performed entirely within such State.


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IN
      WITNESS WHEREOF, the undersigned has caused this waiver to be duly executed
      and
      delivered by their respective duly authorized officers on the day and year
      first
      above written.






ROYAL
                BANK OF CANADA, as Agent
              
              By:    
                /s/KAREN
                STONE
              Name:     
                Karen Stone
              Title:       
                Authorized SignatoryAcknowledged
                and Agreed:
              
              NAVISTAR
                FINANCIAL CORPORATION
              By:     
                /s/   KRISTIN L
                MORAN
              Name:       
                Kristin L Moran
              Title:         
                V.P., & General Counsel
              
              NAVISTAR
                FINANCIAL RETAIL RECEIVABLES CORPORATION
              
              By:    
                 /s/ KRISTIN L
                MORAN
              Name:     
                Kristin L Moran
              Title:       
                V.P., & General Counsel





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